Salora International Ltd., New Delhi V. ACIT, New Delhi

ITA 5105/DEL/2016

• Counselvise Citation: [2019] 114 COUNSELVISE.COM (IT) 2165 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 1 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-11-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 2009-2010
• Appeal Filed On: 28-09-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S S RANA

Judgement Text

SALORA INTERNATIONAL LTD. V. ACIT 22(1) NEW DELHI / I.T.A.NO.5105/DEL/2016/A.Y. 121-3 PAGE 1 OF 3 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH G NEW DELHI BEFORE SHRI AMIT SHUKLA, JUDICIAL MEMBER AND SHRI O.P.MEENA, ACCOUNTANT MEMBER . . /. I.T.A NO.5105/DEL/2016 / ASSESSMENT YEAR:2012-13 M/S. SALORA INTERNATIONAL LTD., D-13/4, OKHLA INDUSTRIAL AREA, PHASE-II, NEW DELHI PAN: AAACS 3041 G VS. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE- 22(1) NEW DELHI APPELLANT / RESPONDENT /ASSESSEE BY NONE /REVENUE BY SHRI S. S. RANA , CIT(D.R.) / DATE OF HEARING: 06.11.2019 /PRONOUNCEMENT ON 07.11.2019 /O R D E R PER O. P. MEENA, AM: 1. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-17, NEW DELHI (I N SHORT THE CIT (A)) DATED 20.07.2016 FOR THE ASSESSMENT YEAR 2012-13. 2. GROUND NO.1 & 2 STATES THAT LD. CIT (A) HAS ERRED IN DISALLOWING A SUM OF RS. 2,02,993 BEING PRIOR PERIOD EXPENSES OF WHICH PROVISION COULD NOT BE MADE IN EARLIER YEAR`S. 3. NONE APPEARED FOR THE ASSESSEE. HOWEVER, LD. D.R. I S PRESENT HENCE, WE ARE DECIDING THE ISSUE ON THE BASIS OF RECORDS. SALORA INTERNATIONAL LTD. V. ACIT 22(1) NEW DELHI / I.T.A.NO.5105/DEL/2016/A.Y. 121-3 PAGE 2 OF 3 4. SUCCINCT FACTS ARE THAT THE ASSESSEE HAS CLAIMED PR IOR PERIOD EXPENSES OF RS. 2,00,993 WHICH WERE CRYSTALLIZED AND PAID DU RING THE YEAR UNDER CONSIDERATION. HOWEVER, THE AO HAS DISALLOWED THE S AME AS THE ASSESSEE IS FOLLOWING MERCANTILE SYSTEM OF ACCOUNTING, HENCE, E XPENSES ARE NOT ALLOWABLE AS DEDUCTION. THE CIT (A) HAS ALSO CONFIRM ED THE SAME. 5. WE HAVE HEARD THE LD. D.R. THE PERUSAL OF FINDINGS OF ASSESSMENT ORDER REVEALS THAT EXPENSES OF RS. 1,19,993 PERTAINS PAYME NT MADE TO BSNL AS FULL AND FINAL AS PER THEIR FINAL LETTER DATED 26.12.201 1 AND PAID ON 28.12.2011 THROUGH SBI RS. 1,04,108 AFTER ADJUSTMENT OF SECURITI ES OF RS. 15,200. THUS, THIS EXPENDITURE IS CRYSTALLIZED DURING THE YEAR UND ER CONSIDERATION AND PAID DURING THE YEAR UNDER CONSIDERATION, HENCE, DISALLO WANCE OF THESE EXPENSES ARE NOT JUSTIFIED. FURTHER, EXPENSES OF RS. 12,014 P ERTAINED FROM 16.03.2011 TO 15.03.2011 OF INTERNET USE, PART OF WHICH WAS PA ID IN PREVIOUS YEAR BUT BILL HAS BEEN RECEIVED IN MAY 2011 AND PAID ON 21.05.201 1. SIMILARLY, COMPUTER EXPENSES OF RS. 8,900 WERE PAID ON 25.03.2011 AS BIL L WAS RECEIVED IN THE MONTH OF MAY 2011. SIMILARLY, ELECTRICITY BILL OF R S. 14,280 OF APRIL AND BILL OF RS. 15,384 OF MAY PAID IN THE MONTH OF AUGUST 2011. THE REMAINING EXPENSES OF MOBILE BILL OF MARCH PAID IN APRIL, 2011. THUS, CONSIDERING THE NATURE OF EXPENSES OF WHICH BILLS WERE RECEIVED DURING YEAR UN DER CONSIDERATION AND PAID DURING YEAR UNDER CONSIDERATION ARE THEREFORE, CRYSTALLIZED AND PAID DURING YEARS, HENCE, SAME ARE ALLOWABLE AS EXPENSES FOR THE ASSESSMENT YEAR SALORA INTERNATIONAL LTD. V. ACIT 22(1) NEW DELHI / I.T.A.NO.5105/DEL/2016/A.Y. 121-3 PAGE 3 OF 3 UNDER CONSIDERATION EVEN THOUGH THE ASSESSEE FOLLOW S MERCANTILE SYSTEM OF ACCOUNTING. ACCORDINGLY, WE HELD THAT THE AO WAS NO T JUSTIFIED IN MAKING DISALLOWANCE OF PRIOR PERIOD EXPENSES. IN VIEW OF THI S MATTER, THE DISALLOWANCE OF RS. 2,00,993 ON ACCOUNT OF PRIOR PE RIOD EXPENSES ARE DELETED. ACCORDINGLY, GROUND NO. 1 AND 2 OF APPEAL IS ALLOWE D. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE STANDS ALL OWED. 7. THE ORDER PRONOUNCED IN THE OPEN COURT ON 07.11.201 9. SD/- SD/- (AMIT SHUKLA) (O. P.MEENA) JUDICIAL MEMBER AC COUNTANT MEMBER DATED: 7 TH NOVEMBER, 2019/OPM COPY OF ORDER SENT TO- ASSESSEE/AO/PR. CIT/ CIT (A)/ ITAT (DR)/GUARD FILE OF ITAT. BY ORDER / / TRUE COPY / / ASSISTANT REGISTRAR, ITAT: DELHI BENCHES- DELHI